Actually, now that I think about it, Namie has performed on Kohaku before with all of her tattoos showing. So...
Maybe Ayu didn't want to have to deal with any possible backlash and Namie just didn't care?
edit: actually I just checked Namie's Kohaku performances and in 02 she had the tattoos showing, but in 03 they were covered (only time I've ever seen hers covered I think) So maybe Namie's tattoos in 02 caused the 'no more tattoos at Kohaku' thing that seems to be going on since. Actually maybe that's the reason Namie hasn't been on Kohaku since '03 - she thinks its ridiculous to have to cover her tattoos.